McDonald's searches for tech ally

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McDonald's Corp. is looking to partner with a leading telecommunications company on a long-term, multimillion-dollar global marketing and technology alliance.

Likely contenders include AT&T Corp., MCI Communications Corp., IBM Corp., Tele-Communications Inc. and Time Warner Cable, according to an executive familiar with McDonald's plans.

The fast-food chain recently sent out a request for proposals to sign up a prime contractor to create a state-of-the-art networking system between McDonald's headquarters in Oak Brook, Ill., and its 18,000 franchisees and company-owned restaurants worldwide.

Key to any plan will be a marketing component.

"Not only are there marketing elements ... the amount of money McDonald's is willing to spend--while significant--clearly implies that a major part of the payback for the partner will be in marketing opportunities with McDonald's," the executive said.


At McDonald's recent international convention, 86% of franchisees voted to have AT&T be the partner, said one franchisee in attendance. But McDonald's is just starting to hear proposals, "so nothing is a lock," said another executive familiar with the plan.

"You look at the McDonald's of the future, and you see video walls, interactive games in their kids play areas, the kinds of things a telecommunications company is expert in," said the second executive. "Let's say McDonald's wants to download clips of the latest Disney movie as part of an in-store promotion. Or making playland cyberland. That's going to take servers and the like. McDonald's is really looking to the future here."

McDonald's has tested a few marketing programs with AT&T, such as giving consumers credits toward long-distance calls based on meal purchases.

"Something like that is just the tip of the iceberg on the marketing side," said the first executive. "These telecommunications companies have strong ties to consumers, and that's something that can be mutually beneficial to the chosen partner and McDonald's."

McDonald's is expected to pick a partner by midsummer at the latest, the first executive said.

Contributing: Pat Sloan.

Copyright May 1996 Crain Communications Inc.

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